I need advice! Our contractor has implemented poured concrete walls for the foundation walls. The excavators backfilled the walls without providing any lateral support. The walls have bowed and cracked. The contractor wants to repair by supporting with steel. My concerns are these; This is a construction error not a latent defect and I want it torn down and done over. Retro support doesn't make sense to me. Who warranties the walls and the waterproofing after this kind of damage. Additionally, he backfilled with a 1 foot layer of gravel and the remaining he backfilled with the dirt from the excavated basement. What is standard? This seems shoddy to me. I could use some helpful advice.

I'd have it re-done. I suspect that you can find an inspector that will tell you exactly what wasn't done right. For example, weak concrete.

IRC code section R404.1.7 states that "backfill shall not be placed against the wall until the wall has sufficient strength and has been anchored to the floor above, or has been sufficiently braced to prevent damage by the backfill".

Depending on who authorized the backfill, either the contractor or the excavator is responsible for the problem.
It is definitely 'human error' and should be taken out and replaced. With the contractor wanting to do a patch job, I suspect he may have OK'd the backfill. It so, then it is his responsiblilty, he knows it, and is trying to avoid having to deal with the costs of removal and replacement.
Backfilling against an unsupported wall will cause bowing and cracking even if everything else was done correctly.
Contact your contractor and tell him to replace the walls. Period.
If he balks, contact a lawyer immediately. Do not allow any further work to be done on the project. Allowing any type of further work to be done could be construed to be approval of his proposed repairs, and shift the responsibility to you.

Wes, You summed it up well. I agree that would be the best plan of action. I might add one more bit of advice: Check your builder contract regarding errors. If the builder is on a cost plus contract instead of fixed, he may try to pass the cost on to you for the repair. I have seen this happen.

The walls need to be self supporting, I agree with the contractors above that they should be redone.

Nice and interesting thread thanks for posting it.